Ethnicity pay reporting: a guide for UK employers

The moral case for pay fairness across all ethnic groups is self-evident. Yet, we still await the consultation response to the 2018 UK Government consultation on mandatory ethnicity pay reporting. And, while the 2020 Black Lives Matter protests led many organisations to publicly condemn racism and discrimination, few have taken steps to voluntarily disclose their ethnicity pay gap, which can play a key role in assessing if and where inequalities exist in their workforce.

In the absence of legislation, the CIPD believes that employers should aim to voluntarily compile ethnicity pay reports as part of their organisation’s approach to improve inclusion and tackle inequality in the workplace.

This guide aims to:

encourage more employers to publish their ethnicity pay data voluntarily 
facilitate this process by recommending the most appropriate and effective approach to categorising and reporting their data 
support analysis and use of the resulting information to produce effective action plans to address the ethnicity pay gaps and inequalities revealed.

Based on the six principles, the CIPD recommends employers publish annual ethnicity reports based on three key components: 

A uniform set of eight commonly defined statistics to profile pay by ethnicity.
A supporting narrative to explain the nature and causation of any pay differentials and gaps by ethnic group evident in their statistics.
An action plan of initiatives defined to reduce and remove any such gaps over time.

To maximise the opportunities and minimise the challenges of ethnicity pay reporting, there are six principles the CIPD recommends:

Align ethnicity pay reporting with gender pay reporting, but recognise the differences.
Remember ethnicity representation is as important as, and strongly linked to, ethnicity pay gaps.
Recognise the value of simplicity and clarity.
Focus on action.
Start and improve.
Combine comparability in data with tailoring of analysis and actions.